The (lack of) evidence to support stock transfer

The government’s policy on the transfer or sale of state housing to community housing organisations is getting a lot of attention lately (I wrote about the end-of-this-era here back in May). I voiced some of my own concern in a submission to select committee [pdf] when the legislation that set up this system was passed- the Social Housing Reform Act (2013)

The community housing sector does a great job housing many New Zealanders. But so does Housing NZ. Whether the community housing sector or Housing NZ is better at doing what they do with the funds they have is a big question that I don’t believe has been answered. The importance of evidence-based policy is nowhere larger than when this involves the transfer of large amounts of public funds and assets,* and I haven’t yet seen that evidence.

The reform is based on the recommendations put forward by the Housing Shareholders Advisory Group (HSAG) in its report Home and Housed: A Vision for Social Housing [pdf]. This group was made up of representatives of the business and community housing sector, and one person from the community sector. One of the recommendations was to:

Transfer either capital or dwellings to selected non-government organisations (NGOs) to initially meet 20% of this [high housing need] sector’s need in five years… [p.9]

At the first reading of the Bill that became the Act, Minister Smith states:

I want to acknowledge the work of the Housing Shareholders’ Advisory Group and its thoughtful and substantive report, on which this reform is based.

However, in reality, this report was explicitly stated as non-substantive by the HSAG group:

In presenting its advice, the HSAG Group has not sought to solve every issue within the affordable and social housing sectors. However, it has established a realistic roadmap built along simple themes. (p.8)

This was partly due to the fact that HSAG conducted its review over a period of five weeks. They concluded that:

The short time-frame available to us limited our ability to engage thoroughly across a complex sector. (p.12)

The lack of evidence in the report was criticised by Statistics New Zealand. Many of the figures and analysis the report bases its arguments on are singled out. Its ‘general comments’ sum up some of the problems:

There is a general lack of information about data sources in the document. Where data sources are given, they are often not the original. This makes it hard to check the validity of the data source.

There is also a general lack of clarity around terminology and lack of consistency in the use of terminology.

The document does not focus very strongly on the data or statistical needs of the social housing system… It will be important to gather good statistical information/metrics, in order to measure the impact of any change, and whether that impact has achieved the desired outcomes.

Other than the data/statistical side, a general comment would be around the need to ensure that the most vulnerable groups (e.g. the homeless and people with multiple/complex needs) do not fall between the cracks. Eg Britain may have introduced a mixed social housing model, but they have large numbers of homeless people / people who have fallen through the cracks. **

For something the Minister is claiming as legitimation for massive reform, it’s pretty shallow, reflecting its rushed origins. It doesn’t provide a lot of evidence for its recommendations. I don’t think a student would get away with handing in a paper with this few references – even if he had as little as five weeks to write it. There are just twelve references, some out of date, few peer-reviewed, and a couple authored by people who have a financial interest in supporting stock transfer.

In total, the references are: a CHRANZ factsheet and a 2007 report; the Department of Building and Housing Draft Report 2010; two reports by community housing providers; the report of the Urban Taskforce; a 2007 AHURI paper on international trends in housing policy; a report by the property consultancy DTZ Research; the HNZ asset management strategy; and a paper and power-point given by a UK community housing provider; and one Motu paper.

Obviously, there is a desperate need for more social housing. I want to be sure that whatever we do from here on in provides for more and better housing. I don’t know the best way forward. But I do want to be sure that our path is based on sound evidence on what will work best for New Zealand. Certainly, none was in the public domain when they passed the legislation that led to this.

* It’s not clear (to me) yet to what extent stock will be transferred or sold.

**Can’t find this on the internet anymore, but have the PDF, if I can figure out how to upload it.